Did the stimulus cost more than the war in Iraq?

Washington Examiner editorial page editor Mark Tapscott warned readers Aug. 23, 2010, to expect to hear a lot from Democrats about the cost of the Iraq War. It might be expensive, he said, but not as expensive as President Barack Obama’s economic stimulus.

Citing data from conservative writer Randall Hoven, Tapscott said, "Obama’s stimulus, passed in his first month in office, will cost more than the entire Iraq War -- more than $100 billion more."

Really? Could the nearly seven-year-long war cost less than the 2009 stimulus, which was designed to keep the U.S. economy from sliding into a depression?

At first glance, the numbers look pretty close. The most recent figures from the Congressional Budget Office, released in August 2010, put the total cost for the stimulus -- from February 2009 through 2019 -- at $814 billion. Estimated funding for the war in Iraq totals $709 billion from 2003 to 2010, according to the same CBO report.

But note the different time periods. The stimulus costs are projected through 2019. But the war spending is calculated only to the end of this year.

We also should note that the $814 billion cost for the stimulus includes $70 billion to fix a problem with the Alternative Minimum Tax, which is designed to target the wealthiest taxpayers but is gradually affecting more people in the middle class.

As for the war cost, we found a variety of opinions on the total. Some reports have higher estimates than the CBO’s for that same time period.

A July 2010 report from the Congressional Research Service estimated the cost at $748 billion, which includes costs for the military, the State Department and foreign aid, and Veterans Administration medical costs related to the war. Add in supplemental appropriation from 2010, and you get about $750 billion, said James R. Horney, director of federal fiscal policy at the Center for Budget and Policy Priorities, a left-leaning group that studies tax and fiscal issues.

Another expert on defense spending told us it’s also important to account for inflation. "The cost of the Iraq War going back seven years and the cost of the stimulus act through 2019 cover a broad stretch of time over which inflation becomes important," Todd Harrison, a senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, said in an e-mail. The center is a think tank that focuses on defense issues.

Adjusted for inflation, the cost of the Iraq War to date totals $756 billion and the stimulus act totals about $820 billion, according to Harrison.

So by that barometer, Tapscott is right that spending on the stimulus exceeds the cost of the Iraq war, although by $64 billion, rather than $100 billion.

But there’s a big assumption in his logic. As Harrison put it to us, the comparison "assumes the cost of the Iraq War ends" this year.

The costs are still adding up. Although the last combat troops have been withdrawn from Iraq, there are still 49,700 troops on the ground conducting security patrols and training Iraqis. And troops are expected to remain until the end of December 2011. Harrison noted that the president’s 2011 budget includes an additional $43.4 billion for Iraq, and "even if the withdrawal continues as planned, we are likely to see a request of $10 billion-$5 billion in the 2012 budget."

And the number could be much higher depending how broadly you define the cost of the war. Some experts believe you should include the continuing costs of disability compensation and medical care for Iraqi war veterans -- costs that will last for decades.

Linda Bilmes, senior lecturer in public policy at the Harvard Kennedy School and co-author of the Three Trillion Dollar War, argues that official government estimates of the war’s costs are too low because they do not take into account costs such as higher combat pay and recruiting costs, Social Security disability payments for veterans who can no longer work, the cost of restoring the military to its pre-war strength (replacing the bullets and bombs that have been used). She and Joseph Stiglitz, a Nobel-prize winning economist at Columbia University, argue that the "true" cost of Iraq will be several trillion dollars.

Bilmes also notes that there are a higher number of disabled veterans from the war in Iraq than in previous wars. According to Bilmes, there are eight veterans wounded in combat in Iraq per fatality,  compared with 2.6 wounded in combat per fatality in Vietnam. In addition, she said in an e-mail, 10 percent of Vietnam veterans enrolled in Veterans Administration health care -- whereas 44 percent of Iraq veterans have already enrolled in VA health care.  Her book estimates the long-term cost of continuing medical care of Iraq and Afghanistan vets to be hundreds of billions of dollars.

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So let’s recap. If it were true that the war and its costs had truly ended today, then Tapscott would be right. But he says that the stimulus will cost more than the "entire" war, and we are persuaded by the experts that with nearly 50,000 troops still in Iraq, it is premature to say the war is over. And when you make reasonable adjustments for inflation, the expected costs of the troops still there and the long-term cost of medical care and re-stocking the military for all the bullets and bombs, it appears likely the war costs will exceed the stimulus. So we find his claim Barely True.